What is the purpose of Option X16?

What is the purpose of Option X16?

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X16 is a mechanism to allow the Employer to retain a percentage of the Contractor’s Price for Work Done to Date each period. Half of the money held will be released upon Completion, and the remaining half paid at the Defect Date (the period for which the Contractor is liable for correcting notified defects).

The purpose of Option X16 is to enable the Employer to retain a proportion of the Price for Work Done to Date as security for any defects that become apparent and as an additional incentive for the Contractor to complete the works (achieve status of “Completion”).